Is It A Good Idea To Disclose Family Income to Teens?

There’s a cool TV series I watch with my kids about money and family budget. Each episode a teen takes over their family’s budget for an entire month. The teen is given access to how much money the family earns and generally what they spend on things such as mortgage and rent payments, gas, school fees and extracurriculars.

The teens must then make sure that money is allocated to nonnegotiable items and to more discretionary spending like money parents and siblings get for things such as coffee, lunch and clothing. Any money saved can be put towards a spending goal of the teen’s choice.

Olly/Shutterstock

The program’s conclusion usually leads to two things. Teens get a much better understanding of where family income is spent. Many teens start off with a self-focused spending goal like a new phone or clothes but after the month their appreciation for the value of money seems to change and they allocate the money to family goals such as a holiday or painting the house.

More than once, the show has left me wondering if I would be comfortable disclosing our family income and spending to my teens. I hesitated because I worried about my kids going to school and bragging about our family income to their peers. I also worried about their potentially childish perception that we made so much money we were billionaires. And, I worried about non-stop nagging and a spike in comments like, “it’s only $350.” As a young person it wasn’t until I was living independently that I really understood the cost of living. and I probably made comments like that because I had no idea what it cost to run a family.

My kids sometimes ask how much my husband and I earn, and I’ve never given a direct answer. Mostly because of the concerns I’ve mentioned above but also because of the values around money and more specifically the way we talked about money when I was growing up.

Talking about money and how much people earned was considered rude by my parents. Open discussion of spending and going out was also considered impolite. My parents believed that knowing about other people’s incomes was divisive in friendships and family relationships. They also didn’t want their children burdened by financial matters. An example of how private my parents were about money is when, in my 30s, I rang to get advice about life insurance from my father and asked direct questions about amounts, he laughed the question off as too personal and talked in vague terms of “working out what I needed.”

When I met my husband’s family this rule around money was sharply challenged. In his family, money was openly talked about. All his family members know what each other’s salaries are. If someone gets a bonus, they tell the family. When people make purchases they openly discuss price.

Overall his family is much more finance educated than my family of origin was. Their family took a more open and honest approach than my family, and the downside was that this knowledge sometimes led to family members being intrusive in each others financial lives. Because they had information about each others financials they could make assumptions about what you should be able to afford or what you should spend.

I investigated what the experts thought about divulging family income to teens and many agreed not all aspects of family finance should be shared. As Scott Pape, independent financial advisor and author of the Barefoot Investor for Familiestold ABC some financial information should be kept to adults in the family because “Their frame of reference is like $9 flipping burgers. So, if you say you’re on $60,000 they think you’re [rich].”

Despite what the experts say, watching teens on TV manage the family budget suggests that greater knowledge of family income could be helpful. Perhaps the combination of not only knowing what the family earns but also being made responsible for the family spending creates a dramatic change in these teens’ perception of money. While it does cause them a degree of stress, particularly when unexpected spending occurs it gave them a very swift education on the true cost of living.

I’m still undecided about what degree of information I will give my kids about our finances but I do know that I want my teen to be more financially literate than I was. That means talking more openly about money than my family did when I was a teen. It means providing more information about money, savings and investments than I received.

I will continue to offer small opportunities to manage a budget, for example, you can spend x dollars on your clothing or party and allow my child to budget how it’s spent. I may start to explain the cost of things in terms of how many hours need to be worked to pay for them rather than just saying no to the expenditure. For now, I will fine tune my decisions based on a calculus of what could be an unnecessary burden and what might enhance my teens’ life skills.

Nadene van der Linden is a clinical psychologist with a special interest in perinatal psychology, parenting and trauma. Nadene’s writing has been published in many online publications including Parent Co and PsychCentral. Join the Unshakeable Calm Facebook group for science-based tips for calmer and confident living.